By Elizabeth Rittiman - May 22nd, 2015
The idea of creating a college budget plan might make you groan. Whether you have financial aid helping you pay for college or not, you still want to be smart about your money and your monthly expenses. Knowing how to budget in college is necessary, and you might find it interesting to see where you’re really spending your money.
Whether you’re already in school or just starting to think about going back, there’s always the issue of money, especially if things are already tight. Don’t let that deter you. While money may be tight in the short term, a college degree could be your ticket to earning more in the long term.
Start by Auditing Your Spending
Do you really know how much you’re spending eating out, buying groceries, and on bills? There are several online tools to help you track your spending habits, such as Mint.com which is free. It syncs up with your bank account and credit cards to monitor how much money you’re spending in all kinds of different categories such as bills, groceries, restaurants, clothing, etc.
Use the first full month just to track your spending because you won’t be able to get an accurate idea of your spending habits in just one week.
Areas to Cut Costs
Once you’ve evaluated your expenses and spending behavior, you’ll be able to better see where you can cut back in order to pay for your educational expenses. Here are some budgeting tips for students to see where you might be able to cut some of your expenses.
Car Payments: If you need a car, make sure you don’t get fooled into buying the extra features you don’t really need or want. Car loans shouldn’t be more than 3 years. Avoid buying a brand new car. Buy used if you have to buy a car or try to make the car you already have last until you’re done with school. It’ll be worth the wait.
Television: My husband and I have been able to save a significant amount of money by cutting out cable and satellite TV. This doesn’t mean we don’t watch TV or that we just watch over the air. After much research, we decided to buy a Roku box. You pay one time for the box (I believe we paid $69 for ours). It comes with free channels and you can also buy extra services like Hulu Plus, Netflix, or HBO Now. It’s still better than the $80 or more a month you were paying for cable.
Eating Out: You do not have to go out to a restaurant to have a fun night out. Instead, why not have a picnic in the park or grill out? You can also invite friends over and have a potluck. You’ll save money and have just as much fun, if not more, as you would eating out.
Groceries: Here’s an area you can really cut costs. Buy in bulk. There are plenty of things you can freeze and save for later. Most dinner recipes can be doubled and then you have a meal for lunch at work the next day. Don’t buy food you don’t really need. Plan every meal in advance for the week and only buy what you need for those and maybe a few items to have around for snacks. Save yourself money and calories by avoiding junk food and juices. Drink water – it’s free!
Textbooks: When it comes to your educational expenses you can still spend wisely. When you need books for school, see if you can buy used books or rent them rather than buy all brand new books.
Alternative Credit Options: Alternative credit options are a great way to save money on your education over the long run. CSU Global allows you to test out of a class through Competency Based Exams or earn credit for previous work experience through a Prior Learning Assessment. Both options can save you money and can help you graduate faster if you are motivated and able to take advantage of these options.
Make Your Financial Plan
Set Your Monthly Budget: Once you have a sense of how much you’re spending where, and you’ve decided where and how to cut costs, you’ll now want to start monitoring your Mint account (or whichever budget tracking program you decide to use) at least once a week to stay on track. Set your budget for the month and monitor your expenses. You may be surprised to find that keeping track will keep you motivated to stay on track.
Create Multiple Savings Accounts: When my husband first told me he wanted to create 12 savings accounts I was overwhelmed and thought he was taking things a little too far. He wasn’t. Basically, for any event or payment that happens at least once a year, we save for it so we do not suddenly have to come up with that money all at once. For example, we have an account for emergencies, vehicle registration, holidays, etc. We save a few dollars from each paycheck into each account. This way when it’s time to pay our vehicle registration for example, it’s not a huge sum suddenly coming out of our bank account all at once. Believe it or not, it is possible to save money while in college.
Use Extra Income Wisely: Say you get some unexpected income. How can you use that money wisely to help you financially in the future? I’m not talking about birthday money, which you should definitely use to treat yourself (or “treat yo’ self” as Parks and Recreation fans would say). I’m talking about extra income like the cash back you might receive from your credit card company. Instead of using that money to go out for dinner or buy new clothes, how about you put the money towards an extra payment on your student loans or car payment. Every little bit will help get those paid off faster. If you don’t have student loans yet, but are using some type of financing for college, use any extra money you receive and go ahead and make a payment with it. Even though you don’t have payments yet, you’re still accruing interest and if you can, try to pay your monthly interest while you’re in school. That will go a long way towards helping you with your student loan payments after you graduate.
Re-evaluate and Adjust When You Need To: Remember, be realistic. Don’t assume you’re suddenly going to cut your grocery expenses by half. Start off easy and see what is really reasonable to accomplish. At the end of each month evaluate your spending in all your different categories and adjust from there. If you find you were able to spend less in any category, readjust your budget so that it reflects the new amount you want to set aside for that category. If you have an area where you are constantly overspending, then maybe your goal is not realistic and you need to make adjustments in other areas so you can spend more in that area.
Elizabeth Rittiman spent the first seven years of her career working in television news. When she moved to Denver with her husband in 2011 she used the opportunity to switch gears in her career to find a role where she could be more of an advocate for the things she was passionate about, education being one of them. When she’s not working, she enjoys skiing and snowshoeing in the Rocky Mountains.